TORONTO — Canada's main stock index rose more than 100 points Thursday, led by gains in energy stocks, while U.S. markets were mixed.
Tech stocks in the U.S. got a boost earlier in the day after Taiwan Semiconductor Manufacturing Co. reported stronger earnings than expected.
The positive news helped offset a recent disappointing report from Dutch chip supplier ASML, said Allan Small, senior investment adviser at iA Private Wealth.
“Taiwan Semi was the biggest factor to the markets to start the day," he said, adding that large tech names will start reporting in earnest next week.
The S&P/TSX composite index closed up 129.28 points at 24,690.48.
In New York, the Dow Jones industrial average was up 161.35 points at 43,239.05, adding to its record. The S&P 500 index was down one point at 5,841.47, while the Nasdaq composite was up 6.53 points at 18,373.61.
Economic data in the U.S. continues to come in stronger than expected, said Small, like the retail sales report released on Thursday.
Retail sales grew in September from August, with underlying growth trends looking better than anticipated.
It’s not often that the U.S. Federal Reserve is cutting interest rates when markets are at all-time highs, said Small.
However, he said he thinks the artificial intelligence frenzy that led a narrow tech-driven rally over the past year and a half is boosting economic data.
This makes the Fed’s job a little more difficult, Small said.
“I think it’s hard to figure out what the next move is for the Fed,” he said, after the central bank started its easing cycle with a larger half-percentage-point cut. Small expects the Fed to announce a smaller cut in November but said “it’s not as clear-cut.”
Meanwhile, other jurisdictions like Canada are on a more certain path, said Small, adding that he thinks the Bank of Canada will announce another quarter-percentage-point cut.
“We are in an interest-rate cutting cycle now,” said Small.
“We don't have a lot of tech up here, so our economy hasn't done as well, therefore the Bank of Canada can take on more of an aggressive path with interest rates, can cut quicker,” he said.
Canadian consumers are also much more sensitive to interest rate fluctuations because mortgage terms are significantly shorter than they are in the U.S.
The European Central Bank announced a rate cut on Thursday, helping boost stock indexes overseas.
The Canadian dollar traded for 72.52 cents US compared with 72.62 cents US on Wednesday.
The December crude oil contract was up 27 cents at US$70.09 per barrel and the November natural gas contract was down two cents at US$2.35 per mmBTU.
The December gold contract was up US$16.20 at US$2,707.50 an ounce and the December copper contract was down four cents at US$4.33 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Oct. 17, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
